Reader Questions - Delinquent Neighbors, “Certified” Managers

Mr. Richardson,

Shouldn’t the board be pursuing legal action against homeowners who are in-default of their association fees? I spoke with one of the members of the Board, she stated that they can’t afford legal action, nor can they afford to take over the home payments. I asked if they had done research (through title searches) to find out if these homes were encumbered for more than their current market value, and she said it was not possible to do that. I know that’s not the truth.

Is it legal for them to use delinquencies of other homeowners as an excuse to raise our dues, or should they have to perform all necessary means before asking for this increase?

G.A., Laguna Hills

Dear G.A.,

Unless all neighbors pay their share of the budget, an association cannot pay its bills and maintain, preserve and protect the property in the community. This is why one of the most important board responsibilities is to make sure that homeowners pay their assessments (I discourage calling assessments “dues”, because one cannot stop paying and resign- HOA membership is mandatory). While boards are often hesitant to enforce assessment obligations, it is a critical part of the board’s duties to the association. If the association is not firm in its insistence that all will pay, the HOA will require increases, with the obvious unfair result that the responsible homeowners subsidize the delinquent neighbors.

Because of the critical need for all association members to pay their assessments, the law gives associations a very powerful took to compel payment – the power to impose a lien and even foreclose, taking away someone’s property to satisfy the assessment debt. While foreclosure is an extreme remedy, some associations are too quick to foreclose. If there is no equity in the property, there may be no reason to foreclose, and the association could be saddled with a worthless property. In that case, only the collection vendor profits, so make sure the HOA checks with its legal counsel before completing foreclosures.

Thanks,
Kelly

Dear Mr. Richardson,

What do you mean by “is your manager certified?” and how do I find out if she is?

Sincerely,

N.E., Hemet

Dear N.E.,

California HOA Managers are not required to be licensed. While a real estate broker license is required to manage rental properties, anyone can manage an HOA. Instead of adding licensing, in 2003 the Legislature added to the Business and Professions Code Sections 11500-11506, creating the “Certified Common Interest Development Manager” title. Being “Certified” is not mandatory, and no state records are kept of those who are Certified. However, managers are required to disclose to associations as soon as practicable before entering a management agreement if they hold a credential or are Certified (Civil Code 5375(c)). Managers must disclose annually to association clients whether the association’s manager is eligible to call themselves “Certified” (Business and Professions Code 11504(a)).

To become “Certified” under Section 11502, managers must receive at least 30 hours in coursework on the Davis-Stirling Act, personnel, risk management, property protection, general management issues and other topics, and also pass an examination on the topics. The Community Associations Institute and California Association of Community Managers offer credentials which qualify to call oneself a “Certified” manager.

Hope this helps,
Kelly

Written by Kelly G. Richardson

Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.